EUR/USD Analysis: Bearish Momentum Tests Support Near 1.1100

The EUR/USD pair has broken slightly below its month-long consolidation range of 1.1114 to 1.1269, driven by renewed selling pressure following the release of the U.S. October inflation report. While the single currency has dipped under range support, confirmation of a sustained structural breakdown remains pending. Market participants are watching whether price action will execute a liquidity sweep below recent swing lows before attracting potential buyers.

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From a fundamental perspective, the U.S. dollar continues to draw support from market pricing around the Federal Reserve's monetary policy outlook. However, macroeconomic conditions in the Eurozone also present a hawkish narrative, with EU inflation accelerating to 4.0% and pointing toward a potential third interest rate hike by the European Central Bank in December. Despite these converging rate outlooks, the euro has struggled to build upside traction.

Additional macroeconomic factors include political developments in the United States, where a divided Congress following recent election results may lead to legislative delays. Across broader currency markets, policy divergence remains visible as the Bank of England advances its tightening cycle, whereas euro price action has remained largely unresponsive to regional fundamental shifts.

Technical Structure and Smart Money Levels

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Technically, the short-term market structure favors sellers. The pair's previous liquidity sweep above 1.1270 reinforced downward momentum, leaving a key technical zone—designated as Imbalance 24—active as overhead resistance. Buyers need to invalidate this imbalance and establish clear bullish patterns before any sustained recovery can be anticipated.

Immediate downside focus rests on key support targets, specifically the recent swing low of 1.1105 and the major low of 1.1066 established in June. A liquidity sweep beneath these key levels could trigger a potential technical reaction if counter-trend demand emerges.

Upcoming Economic Data

Market participants are monitoring scheduled economic calendar events to gauge directional momentum. Key releases include the Eurozone Third Quarter GDP report (10:00 UTC) and the U.S. Producer Price Index (13:30 UTC). The U.S. PPI data, in particular, holds potential to drive volatility and influence dollar sentiment across late-week trading sessions.

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